Volume 2, Issue 9 – May 15th, 2014
Confirmed by the Senate on April 28, Dr. David Weil became Administrator of the Department of Labor’s Wage and Hour Division of the when he squeaked by on a Senate confirmation vote of 51 votes.10
The Wage and Hour Administrator is in charge of interpreting and enforcing the federal Fair Labor Standards Act. The law and enabling regulations cover minimum wage and overtime rules, as well as exemptions from wage and hour requirements.
Because he has spent an almost 30-year long academic career toiling as a professor, Weill has left a paper trail of writing that reveals a great deal about the approach he will take to his new job.
Weil also has written reports for DOL, including one in 2012 on how the Wage and Hour Division should be managed that offers significant insight into Weil’s priorities and his approach to enforcement of wage and hour laws. That report identifies several “priority industries”–including logistics providers and moving companies.
Terence Smith of the law firm of DLA Piper LLP cites that report to predict how Weill will act. “Weil is more partisan than scholar; he has openly endorsed aggressively coercive union tactics, including advocating the use of regulatory agencies to advance union campaigns” and his “willingness to subordinate fact to partisan results is well established,” Smith says.
He notes that the Wall Street Journal called Weil “a life-long, left-wing academic with labor-union sympathies, no private-sector experience or legal training, and limited management experience.”
“Under Weil, agency success will be defined quantitatively: that is, success = more DOL lawsuits,” Smith says, pointing out that President Obama’s budget proposal includes an unprecedented jump in funding for the Wage and Hour Division, with funds earmarked for strategic enforcement activities.
Smith says that under Weil DOL will subordinate the merits to serve union agendas. “Weil’s Strategic Enforcement study laments the decline of union representation and encourages an active partnership between regulatory agencies and unions. Put bluntly, a union need only ask to trigger an investigation.”
Smith predicts “the emphasis will be on accountability for the sins of others.” Weil’s 2012 report urges that “fissured industries” – his term for business plans that include outsourcing – requires that companies be held responsible for the violations of other employers they do business with, regardless of existing legal rules. He urges regulators to “act on webs or networks of employers, not on single, fixed organizations.”
DOL began applying Weil’s plan before he was sworn in, Smith observes. In one case, the department did not question a company’s compliance but demanded that it identify every entity with which it had done business and every entity with which it planned to do business.
DOL also ordered a company to require its suppliers comply with the FLSA, monitor their compliance, and report those audits to DOL.
“In short, Weil appreciates the cost of far-reaching investigations and litigation, and proposes to use that cost to shakedown the convenient rather than prosecute the guilty,” Smith says.
Expect Weil to ignore the law to pursue a personal agenda, Smith warns. “While couched in academic jargon, his own words reveal an intention to ignore the laws passed by Congress in making those shakedowns.”
Smith cites this quote taken directly from Weil: ‘The direct, two-party relationship assumed in federal and state legislation and embodied in traditional approaches to enforcement no longer describes the employment situation on the ground.”
Smith says Weil will approach enforcement like trophy hunter, targeting industries and then targeting the biggest and best companies in those industries. “In short, enforcement efforts will have nothing to do with whether a company has violated the FLSA but only with its success.”
